New Year, New Problems: New California Laws All Employers Must Be Aware Of

As the clock strikes midnight on January 1, 2018, people around the country will be celebrating with grand hopes of prospering in the New Year. However, California employers should be prepared to take on the ever-changing employment landscape before the first champagne (or cider) bottle is popped. Three key employee-friendly laws – AB-1008, AB-168, and SB-63 – were passed by the California Legislature and will go into effect on January 1, 2018. In addition to these laws, recreational, adult-use cannabis becomes legal for purchase. Thus, it is crucial that all employers be aware of how these new laws will impact their businesses well in advance of January 1, 2018.

Under AB-1008, commonly referred to as “Ban the Box,” it is now unlawful for California employers with at least 5 employees to:

Include on any employment application questions that seek the disclosure of an applicant’s conviction history;

Inquire into or consider the conviction history of an applicant before the applicant receives a conditional offer of employment; and

Consider or disseminate information to others about an applicant’s arrests not resulting in a conviction, referral to or participation in a diversion program, or convictions that have been sealed, dismissed, expunged, or eradicated by statute when conducting a criminal background check in connection with an employment application.

Once the conditional offer of employment has been made and the criminal history obtained, the employer cannot deny an applicant a position solely, or in part, because of conviction history until the employer performs an “individualized assessment” of the employee’s conviction history compared with the job duties of the position. The “individualized assessment” must justify denying the applicant the position by linking relevant conviction history with specific job duties of the position sought. This assessment is not required to be in writing.

After the individualized assessment is made, the employer must provide a “preliminary decision” in writing to the employee that informs them that their conviction history has disqualified them from employment. The applicant will then have 5 business days to appeal the employer’s decision to the employer directly. The employer may still deny the applicant’s employment after receiving the applicant’s appeal. The “final decision” must be made in writing.

In both the preliminary and final decisions, the employer is not required to justify or explain its decision to the applicant.

Under AB-168’s “Prohibition of Salary Inquiries law,” employers are prohibited from asking job applicants to disclose their salary history at any point during the application and/or interview process. The new law does not prohibit employers from asking applicants about their salary demands so long as the employer avoids asking about the applicants’ salary history. Additionally, employees are allowed to voluntarily disclose that information. However, if an employee does voluntarily disclose their salary information, the employer will be prohibited from relying on the salary information in determining whether to offer the job and at what salary. Finally, employers will be required to provide job applicants with a pay scale for the position the applicant is applying for upon request. That means if you do not have a current pay scale for positions that you plan on hiring for, you need to develop one.

Under-SB 63’s “The New Parent Leave Act,” employees of smaller employers are required to offer the parental leave benefits previously offered only to employees of larger employers through the California Family Rights Act (“CFRA”). Under CFRA, employers with 50 or more employees within a 75 mile radius are required to provide eligible employees up to 12 weeks of unpaid parental leave to bond with a new child. The New Parent Leave Act provides those same benefits to eligible employees of companies with 20-49 employees within a 75 mile radius.

Unique to The New Parent Leave Act is that the California Department of Fair Employment and Housing (“DFEH”) is required to create a pilot mediation program that allows employers who are faced with a DFEH complaint alleging they violated The New Parent Leave Act to request, within 60 days of receiving a right-to-sue notice, that all parties participate in the department’s Mediation Division Program. A request for mediation would serve to bar an employee from filing a lawsuit until mediation is complete. This provision will sunset on January 1, 2020.

Lastly, with recreational “adult-use” marijuana become legalized beginning on January 1, 2018, many employers are worried about whether they can still enforce their drug-free workplace polices. Chill out! Just like with alcohol, employers still have the right to maintain a drug-free workplace. Further, employers are not required to permit or accommodate the use of cannabis in the workplace. However, because this is California, there is, of course, a caveat. If an employee says they have a condition for which they use medical marijuana or if medical marijuana is prescribed, employers must still engage in the interactive process to determine if some other accommodation can be made.

Employers should immediately review and revamp all application materials to comply with the “Ban the Box” and “Prohibition of Salary Inquiries” laws. Employers must also train human resources or hiring personnel to avoid asking questions to applicants regarding criminal convictions and previous salaries.

Additionally, this is also a good time for employers to remember that it is not illegal to enforce valid workplace polices, though employers must enforce those polices on a consistent basis. This applies both to policies regarding hiring employees with convictions under “Ban the Box” and to policies dealing with employees who use cannabis against company policy. Failure to apply these polices consistently with all applicants and/or employees may subject employers to various discrimination claims.